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Strategies & Market Trends : Value Investing
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To: James Clarke who wrote (3721)4/1/1998 8:17:00 PM
From: Ron Bower  Read Replies (1) of 78519
 
James,

You have proven that one must look at BV in initial screening of stocks. It can often find a stock beaten down for the wrong reasons. BV alone can, at times, find very good buys.

My example: company bought out a company that went bankrupt. Wrote off the costs to move the equipment to a factory with lower labor costs plus they had much higher costs due to the R&D and marketing without offsetting revs. Caused two Qs of losses and the stock fell below the understated BV due to a high PE on trailing quarters. But- forward PE was under 4. Stock screening doesn't find companies like this and these are the ones we're trying to find.

What found St. Joe & WHX? Wasn't the PE.

For what it's worth,
Ron
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